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Senate agrees to create exchange

SPRINGFIELD (AP) – The Illinois Senate agreed Thursday to create a state-governed “health insurance exchange” where individuals and small businesses could shop for coverage as required by President Barack Obama’s health law.

Lawmakers voted 37-19 to establish the Illinois Health Insurance Marketplace and send the bill back to the House for further consideration. Gov. Pat Quinn released a statement calling the measure “an important first step” toward full implementation of the national health law. But the measure is dividing consumer advocates, with some groups breaking ranks and calling for a new approach.

Brian Imus of Illinois Public Interest Research Group said the measure lacks an independent governing board with any real power to negotiate better premium rates for consumers.

“This is too important to rush through in the last few days in session,” Imus said. “We absolutely need a state-based exchange, but we should do it right.”

The marketplace is expected to guide people through the purchase of health and dental insurance plans. It also would help qualified businesses enroll their employees in health insurance plans.

The Affordable Care Act – Obama’s signature domestic achievement – calls for almost all Americans to have health insurance beginning in 2014 or pay a penalty. New insurance marketplaces are scheduled to be operating in every state on Oct. 1. Illinois will begin an exchange this year through a federal partnership, but Gov. Pat Quinn hopes to establish a state-run marketplace for coverage starting in 2015.

The legislative proposal creates the exchange’s governing board, and it provides that its 11 members should be appointed by the governor and represent minority groups, people with disabilities, labor and small businesses, among others. The bill also establishes a series of recusal procedures and conflict of interest rules that members must abide by.

The board would review the health plans offered through the exchange to verify that they meet various standards including affordability and quality of care.

Industry estimates show that operating the exchange will cost between $54 million and $89 million.

The Illinois Senate has now approved two major pieces of Obama’s health overhaul law: the expansion of Medicaid to cover many low-income people without children at home and the state-governed insurance marketplace where middle-income people will be able to get financial subsidies to help pay for coverage.

Jim Duffett of the Campaign for Better Health Care, a consumer group that supports the national health law, said he was hopeful the House would approve both proposals next week.

There may be roadblocks to passage in the House. The bill would require Illinois insurance carriers to finance the cost of the marketplace through an assessment based on the dollar amount of premiums each carrier collects from Illinois insurance customers.

That’s causing headaches for the insurance industry, which isn’t entirely happy with the way the assessment is structured, said Elena Butkus of Aetna Inc., which is “officially neutral on the bill right now where it stands.”

“There has to be set of checks and balances regarding how much the industry will be assessed,” Butkus said.

Quinn, a Democrat, released a statement thanking Sen. Dave Koehler, a Peoria Democrat, for leadership on the bill and calling the Senate action “an important milestone.”

“This legislation is an important first step towards my agenda to ensure Illinois fully reaps the benefits of the Affordable Care Act,” Quinn said in the statement.